Global Affairs Canada renews and expands its Responsible Business Conduct strategy for Canadian companies abroad

Global Affairs Canada is renewing its strategy for supporting Canadian companies’ Responsible Business Conduct (RBC) abroad. While previous iterations were focused on the extractive sector, Global Affairs Canada is expanding the RBC strategy to address all economic sectors. Feedback received by October 16, 2020 will be considered in developing this strategy, anticipated to guide Canada’s support for Canadian business abroad over the next five years. These developments highlight the need for Canadian companies in all sectors to monitor their activities abroad and develop strategies to ensure appropriate conduct. The Issue Paper, published by the Government of Canada, suggests that the government is paying close attention to these matters and is likely to take further action in this area going forward.

What you need to know

• In 2009 and 2014 the Government of Canada released and updated an RBC strategy for Canadian companies operating abroad, focused on the extractive sector. The government is now renewing that guidance and broadening its scope to include all sectors of industry.
• The government has published an Issue Paper for parties’ comments, which provides the overarching goals of the new strategy and key global trends that may influence it:
  • Overarching goals are described as: 1) contributing to a strengthened and inclusive RBC environment globally; 2) supporting Canadian companies to achieve and exceed RBC best practices; and 3) enhancing accountability through providing access to dispute resolution, dialogue, recourse and remedy.
  • Key trends influencing the strategy are: 1) UN Sustainable Development Goals; 2) reconciliation with Indigenous peoples; 3) addressing climate change; 4) opportunities and risks from new technologies; 5) development of industry-specific standards; and 6) due diligence and supply chain management, particularly to combat human trafficking and forced labour.
• Input is sought on tools to advance these goals, including: making RBC practices a condition of access to government trade and other support, awards for leaders, programs fostering stakeholder collaboration and dialogue abroad, requiring disclosure of RBC-related conduct, and potential legislative or tax measures to incentivize RBC practices.

Background

In 2009 and 2014, the federal government released RBC strategies focused on supporting Canadian companies in the extractive sector abroad. The government began an evaluation of this strategy in 2019, conducted initial stakeholder interviews in March 2020 to develop an issue paper for comment, and is now broadening its request for input based on that paper¹.

Issue Paper

The Issue Paper outlines, among other things, the overarching goals of the renewed strategy, key global trends with respect to RBC that may influence the new strategy, and a summary of the views and ideas expressed during the March 2020 consultations.

Goals

The three overarching goals that will shape the drafting of the new strategy include: 1) contributing to a strengthened and inclusive RBC environment globally; 2) supporting Canadian companies to achieve and exceed RBC best practices; and 3) enhancing accountability through providing access to dispute resolution, dialogue, recourse and remedy.

Global trends

The Issue Paper describes six “key global trends” which could influence the development of the renewed strategy. The six key trends are as follows.

1. The United Nations Sustainable Development Goals (SDGs). Canada adopted the SDGs in 2015. The SDGs aim to end poverty, protect the planet and ensure people can enjoy peace, property and their human rights by 2030. The Issue Paper calls upon the private sector to offer access to markets, share innovative approaches and expertise, and foster new opportunities to promote growth in developing countries in order to meet these goals.
2. Reconciliation with Indigenous Peoples. Canada has endorsed the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and the federal government has committed to implement it into law. UNDRIP, as a declaration of the UN General Assembly, applies to Canadian companies’ operations abroad as well.
3. Climate change. The Paris Agreement has been ratified by Canada and 193 other parties. It entered into force on November 4, 2016. It seeks to strengthen the global response to climate change and requires parties to set national greenhouse gas reduction targets.
4. New technologies. The Issue Paper acknowledges that new technologies such as artificial intelligence, machine learning and blockchain pose simultaneous risks and opportunities for RBC. One opportunity advanced in the Issue Paper is the potential capacity of blockchain, by creating immutable and transparent records of contracts, to improve the ability of firms to perform supply chain due diligence. The development of artificial intelligence in a manner consistent with human rights, diversity and the rule of law is also discussed.
5. Industry standards and certification. Industry-developed standards and certifications have, in some instances, gained broad acceptance globally and demonstrate the commitment by private sector groups to promote RBC. The Issue Paper discusses the Mining Association of Canada’s 2004 launch of “Towards Sustainable Mining”, as an industry standard for responsible mining that is being increasingly adopted in mining jurisdictions globally. Similar opportunities may exist in other sectors.
6. Due diligence and supply chain legislation. The Issue Paper cites the international recognition of the need to source and advance sustainable supply chains, particularly in relation to combatting human trafficking and forced labour. The Issue Paper also references Canada’s ongoing efforts to develop global supply chain legislation.

Tools considered

The Issue Paper seeks input on tools to advance the new RBC strategy. It includes for consideration: making RBC practices a condition of access to government trade and other support, awards for leaders, programs fostering stakeholder collaboration and dialogue in countries abroad, requiring disclosure of RBC-related conduct, and potential policy, legislation or tax measures to incentivize RBC practices.

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¹ Comments can be provided by October 16, 2020 to the Responsible Business Practices Division at Global Affairs Canada via email at [email protected].